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Re: Gathering opinions: deciding between LLC and Not-for-Profit

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Chris Blair
Re: Gathering opinions: deciding between LLC and Not-for-Profit
on Sep 27, 2009 at 2:14:04 am

Diana DiGiano: Since my intention is to create educational/historical media, this structure could be right for me.

Operating as a non-profit corporation is a slippery slope in my opinion. Most people perceive a non-profit or not-for-profit corporation as one whose aim is to provide altruistic work to aid others.

Places like hospitals, schools, arts organizations, zoos, and the like are all designed to provide enrichment to the people that use their services.

I suppose you could argue that if you're making strictly educational or historical videos, your business is the same. But as soon as you start competing with "for profit" production companies and agencies for corporate or commercial work, you pretty much break the spirit of being a non or not-for-profit company.

Like Grinner, there was a company in the town I used to live that operated like that. They'd compete with and underbid other companies for corporate work, then cozy up to the large PBS affiliate in town to receive grant supported work. They'd compete with indepedendent filmmakers for grant money to make documentaries, while at the same time producing the latest music video for mid-level country music artists. The owner drove expensive, fancy cars (yes plural), and somehow ended up on the society pages of the newspaper time and again. Then, he somehow ended up being named Production Director at the PBS affiliate, and he CONTINUED to run his business. As production director of the local PBS station, he would award local PBS work to his own company!

It was an ugly situation and let's just say he was viewed with much disfavor in the production community.

So I think the key is that if you incorporate as non-profit, you need to run your business in the spirit it's intended and not compete for obviously profit oriented projects with local and regional production companies. In my opinion, you can't have it both ways. You can't claim to be a non-profit to qualify for grant supported work (I know, I spent 3 years making independent films and have an Emmy to show for it), then turn around when it suits you and compete for that big commercial job with the large regional hospital (just because they're non-profit).

I have no idea what your plans are, but from an ethical point of view, you should take one route or the other and be true to the spirit of what being a non-profit is about.

Chris Blair
Magnetic Image, Inc.
Evansville, IN

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